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Regulatory Takings in Institutional Context: Beyond the Fear of Fragmented International Law

  • Steven R. Ratner (a1)

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The last decade has witnessed a rebirth of popular and academic interest in the international norms governing expropriation. Debate has centered on the competing claims of corporations, host states, nongovernmental organizations (NGOs), and other actors over the extent to which governments may regulate their economies in a manner that affects foreign investment without compensating investors for resulting economic harm. The current controversy over regulatory takings represents the second act in international law’s expropriation battles; whereas the first act comprised the long dispute between North and South over compensation after an overt nationalization, today’s dispute turns on whether a governmental regulation is an expropriation in the first place. This issue is not new to international law, as old diplomatic intercourse and arbitrations demonstrate; but the range of actors making claims, the venues for their resolution, and the outcomes of these processes are more diverse, particular attention having been generated by the case law of arbitrations under the North American Free Trade Agreement (NAFTA) and bilateral investment treaties (BITs). Complaints have concerned both the outcomes of disputes and the processes involved in their resolution.

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* I greatly appreciate comments and suggestions from Tom Allen, José Alvarez, Jeffrey Dunoff, Daniel Halberstam, Robert Howse, Dino Kritsiotis, Yuval Shany, and my colleagues participating in the University of Michigan Law School’s Fawley Talks. I also thank Theodore Kill and Michelle Lee of the University of Michigan Law School for their superlative research assistance. The alternative title for this paper might be “How I Learned to Stop Worrying and Love Fragmentation.”

1 International Law Commission [ILC], Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law, Report of the Study Group of the International Law Commission, Finalized by Martti Koskenniemi, UN Doc. A/CN.4/L.682, at 19 (Apr. 13, 2006) [hereinafter Koskenniemi Study]. This notion resembles the broad definition of conflict found in Joost Pauwelyn, Conflict of Norms in Public International Law: How WTO Law Relates to Other Rules of International Law 169–70 (2003).

2 See Steven, R. Ratner, Corporations and Human Rights: A Theory of Responsibility , 111 Yale L.J. 443, 45557 (2001).

3 See GA Res. 1803, UN GAOR, 17th Sess., Supp. No. 17, at 15, UN Doc. A/5217 (1962).

4 Prosper, Weil, The State, the Foreign Investor, and International Law: The No Longer Stormy Relationship of a Menage à Trois, 15 Icsid Rev. 401, 407 (2000).

5 See, e.g., The Valuation of Nationalized Property in International Law (Richard, B. Lillich ed., 4 vols., 197287).

6 Weil, supra note 4, at 412.

7 World Bank Guidelines on the Treatment of Foreign Direct Investment, Art. IV (1992), reprinted in I., Ibrahim F. Shihata, Legal Treatment of Foreign Investment: “The World Bank Guidelines” 155, 16164 (1993).

8 See generally Sornarajah, M., The International Law on Foreign Investment 344488 (2d ed. 2004).

9 Michael, W. Reisman & Robert, D. Sloane, Indirect Expropriation and Its Valuation in the BIT Generation , 2003 Brit. Y.B. Int’l L. 115, 118.

10 For an example of where compensation is still a major issue, see Andrew, E. Kramer, Shell Bows to Kremlin Pressure on Gas Project; Offer to Sell Stake in Sakhalin Comes as Russia Tightens Grip , Int’l Herald Trib., Dec. 12, 2006, at 1.

11 See, e.g., Philippe, Sands, Lawless World 13340 (2005); Vicki, Been & Joel, C. Beauvais, The Global Fifth Amendment? NAFTAs Investment Protections and the Misguided Quest for an InternationalRegulatory TakingsDoctrine , 78 N.Y.U. L. Rev. 30 (2003). But see David, A. Gantz, Potential Conflicts Between Investor Rights and Environmental Regulation Under NAFTAs Chapter 11 , 33 Geo. Wash. Int’l L. Rev. 651 (2001). Among NGO attacks, see Public, Citizen, Nafta’s Threat to Sovereignty and Democracy: The Record of Nafta Chapter 11 Investor-State Cases 1994–2005 (Feb. 2005). For the award, see Metalclad Corp. v. Mexico (NAFTA Ch. 11 Arb. Trib. Aug. 30, 2000), 40 ILM 36 (2001).

12 See, e.g., Rudolf, Dolzer, Indirect Expropriations: New Developments? 11 N.Y.U. Envt’l L.J. 64, 68 (2002) (critiquing “jurisprudential heterogeneity presumably unsustainable in the long run”); Yves, L. Fortier & Stephen, L. Drymer, Indirect Expropriation in the law of International Investment: I Know It When I See It, or Caveat Investor, 19 Icsid Rev. 293 (2004); see also Susan, D. Franck, The Legitimacy Crisis in Investment Treaty Arbitration: Privatizing Public International Law Through Inconsistent Decisions , 73 Fordham L. Rev. 1521 (2005); David, A. Gantz, An Appellate Mechanism for Review of Arbitral Decisions in Investor-State Disputes: Prospects and Challenges , 39 Vand. J. Transnat’l L. 39 (2006).

13 Compare Sempra Energy Int’l v. Argentine Republic, ICSID No. ARB/02/16 (Sept. 28, 2007), and Enron Corp. & Ponderosa Assets v. Argentine Republic, ICSID No. ARB/01/3 (May 22, 2007), and LG&E. Int’l v. Argentine Republic, ICSID No. ARB/02/1 (Oct. 3,2006), and CMS Gas Transmission Co. v. Argentine Republic, ICSID No. ARB/01/8 (May 12, 2005), all available at <http://ita.law.uvic.ca>, with Expropriation Claim of Ponderosa Assets (OPIC Aug. 2, 2005), available at <http://www.opic.gov/insurance/claims/report/documents/Ponderosa_Assets_L.P._202005.pdf>. For a similar finding under the UK-Argentina BIT, see BG Group v. Republic of Argentina, paras. 258–72 (UNCITRAL Dec. 24, 2007), available at <http://ita.law.uvic.ca>.

14 See, e.g., Franck, supra note 12, at 1582–87; Charles, H. Brower II, Structure, Legitimacy, and NAFTAs Investment Chapter , 36 Vand. J. Transnat’l L. 37 (2003); cf. Jan, Paulsson, Denial of Justice in International Law 24748 (2005) (citing statement of Senator John Kerry).

15 Jeffery, Atik, Repenser NAFTA Chapter 11: A Catalogue of Legitimacy Critiques , 3 Asper Rev. Int’l Bus. & Trade L. 215 (2003); see also Carlos, G. Garcia, All the Other Dirty Little Secrets: Investment Treaties, Latin America, and the Necessary Evil of Investor-State Arbitration , 16 Fla. J. Int’l L. 301 (2004) (authored by lawyer representing Mexico in NAFTA cases).

16 See, e.g., Dolzer, supra note 12, at 90–93; Rosalyn, Higgins, The Taking of Property by the State: Recent Developments in International Law , 176 Recueil Des Cours 259, 33839 (1982 III).

17 Philippe, Sands, Searching for Balance: Concluding Remarks , 11 N.Y.U. Envt’l L.J. 198 (2002).

18 See generally Louis, Kaplow, An Economic Analysis of Legal Transitions , 99 Harv. L. Rev. 509 (1986).

19 The Dispute Settlement Body of the World Trade Organization has not faced these issues, in part because of the minimal WTO law on trade-related investment measures, though some have suggested it could engage these issues. See Ernst-Ulrich, Petersmann, Justice as Conflict Resolution: Proliferation, Fragmentation, and Decentralization of Dispute Settlement in International Trade , 27 U. PA. J. Int’l Econ. L. 273, 31420 (2006).

20 See, e.g., Been & Beauvais, supra note 11, at 128-39.

21 See, e.g., Christie, G. C., What Constitutes a Taking of Property Under International Law? 1962 Brit. Y.B. Int’l L. 307 ; Dolzer, supra note 12; Reisman & Sloane, supra note 9; Burns, H. Weston, Constructive TakingsUnder International Law: A Modest Foray into the Problem ofCreeping Expropriation,” 16 Va. J. Int’l L. 103 (1975).

22 As to whether regulations that are not pursuant to public purpose, not according to law, or discriminatory are unlawful even if a state compensates for them, compare Giorgio, Sacerdoti, Bilateral Treaties and Multilateral Instruments on Investment Protection , 269 Recueil Des Cours 251, 389 (1997) (maintaining distinction between legal and illegal expropriations), with Jan, Paulsson, Ghosts of Chorzów: Maha Nuñez-Schultz v. Republic of the Americas, in International Investment Law and Arbitration 777, 789 (Todd, Weiler ed., 2005) (rejecting it).

23 See, e.g., Louis, B. Sohn & Baxter, R. R., Responsibility of States for Injuries to the Economic Interests of Aliens , 55 AJIL 545, 55253 (1961); see also Restatement (Third) of the Foreign Relations Law of the United States §712 cmt. g (1987) [hereinafter Restatement].

24 See, e.g., 1 United Nations Conference on Trade and Development [UNCTAD], International Investment Agreements: Key Issues 248–54, UN Doc. UNCTAD/ITE/IIT/2004/10 (Vol. I), UN Sales No. E.05.II.D.6 (2004) (offering guidance to states on preparing investment protection agreements and noting the range of clauses addressing expropriation and related measures).

25 Unlike Weston and others, I do not equate a “creeping expropriation” with an indirect one. As Reisman and Sloane point out, supra note 9, at 122–28, creeping expropriation describes a process of governmental interference with foreign investment that may end in either a direct expropriation or an indirect one. There is also disagreement on whether the term “tantamount to expropriation” is different from the term “indirect expropriation.” See Been & Beauvais, supra note 11, at 51–53.

26 For other endorsements of these three factors, see Organisation for Economic Co-operation and Development [OECD] Negotiating Group on the Multilateral Agreement on Investment (MAI), The Multilateral Agreement on Investment: Draft Consolidated Text, Oecd Doc. DAFFE/MAI(98)7/REV 1 (Apr. 22, 1998), available at <http://wwwl.oecd.org/daf/mai/pdf/ng/ng987r1e.pdf> ; Fortier & Drymer, supra note 12, at 300–25; Andrew, Newcombe, The Boundaries of Regulatory Expropriation in International Law , 20 Icsid Rev. 1, 4049 (2005).

27 Christie, supra note 21, at 337. For a recent case citing key endorsements by tribunals, see BG Group v. Argentina, supra note 13, paras. 261–68. See also Higgins, supra note 16, at 271 (noting that diminution in value is uncompensated “so long as rights of use, exclusion and alienation remain”); Yves, Nouvel, Les mesures équivalent à une expropriation dans la pratique récente des tribunaux arbitraux , 106 Revue Generale De Droit International Public 79, 90 (2002) (identifying standard as “substantial deprivation,” but noting that indicators are “the use, enjoyment, and management of the investment”). For a notable preference for a broader factor, namely deprivation of economic use and enjoyment, see Rudolf, Dolzer & Christoph, Schreuer, Principles of International Investment Law 10708 (2008). On the basis of the few cases cited, this represents a minority view, although the cases might be reconciled with a control test.

28 Compare Azurix Corp. v. Argentine Republic, ICSID No. ARB/01/12, paras. 310–11 (July 14,2006), available at <http://ita.law.uvic.ca>, and Higgins, supra note 16, at 330–31, and Nouvel, supra note 27, at 93–96, with Christie, supra note 21, at 331–32, and Dolzer, supra note 12, at 90–93, and Fortier & Drymer, supra note 12, at 313–14.

29 See generally Rudolf, Dolzer, Fair and Equitable Treatment: A Key Standard in Investment Treaties , 39 Int’l Law. 87 (2005).

30 It is at the same time worth noting the significant similarity between the three factors discussed above and those that the United States Supreme Court adopted in Penn Central Transp. Co. v. City of New York , 438 U.S. 104 (1978). I thus disagree with the assessment in Been & Beauvais, supra note 11, at 59–86, who rely excessively on the outcome in Metalclad v. Mexico, supra note 11.

31 See, e.g., Separate and Dissenting Opinion of Judge Cassese, Prosecutor v. Erdemović, No. IT–96 –22–A (Int’l Crim. Trib. Former Yugo. Oct. 7, 1997), available at <http://www.un.org/icty/>.

32 Lithgow v. United Kingdom, 102 Eur. Ct. H.R. (ser. A) 9, 49–50 (1986); Paulsson, supra note 22, at 789; Vaughan, Lowe, Regulation or Expropriation? 55 Current Legal Probs. 447, 463 (2002).

33 See, e.g., Been & Beauvais, supra note 11, at 141 (“little clarity or consensus in international law about how to define such actions”).

34 Newcombe, supra note 26, at 40–49. Indeed, Joseph L. Sax, Takings and the Police Power, 74 Yale L.J. 36, 51–53 (1964), and Kaplow, supra note 18, at 522–25, earlier noted the broad problems with expectations analysis and the definition of property.

35 Katharina, A. Byrne, Regulatory Expropriation and State Intent , 2000 Can. Y.B. Int’l L. 89.

36 Newcombe, supra note 26, at 20–22.

37 See generally Been & Beauvais, supra note 11.

38 Jan, Paulsson, Indirect Expropriation: Is the Right to Regulate at Risk? Transnat’l Disp. Mgmt., Apr. 2006, at 1, 9.

39 Fortier & Drymer, supra note 12, at 327.

40 See, e.g., Draft Articles on Responsibility of States for Internationally Wrongful Acts, Art. 8, in [2001] 2 Y.B. Int’l L. Comm’n 26, 26, UN Doc. A/CN.4/SER.A/2001/Add. 1 (Part 2) (on attribution to state of private activity); cf. Daniel, Bodansky & John, R. Crook, Symposium: The ILCs State Responsibility Articles: Introduction and Overview , 96 AJIL 773, 783 (2002) (noting some ambiguities in the articles).

41 Stephen, D. Krasner, Structural Causes and Regime Consequences: Regimes as Intervening Variables , in International Regimes 1, 2 (Stephen, D. Krasner ed., 1983).

42 Robert, O. Keohane, International Relations and International Law: Two Optics , 38 Harv. Int’l L.J. 487, 490 (1997). On the different views regarding the effects of regimes on state behavior, see Krasner, supra note 41, at 8 –10.

43 André, Nollkaemper, On the Effectiveness of International Rules , 27 Acta Politica 49, 5556 (1992).

44 S.S. Wimbledon (UK, Fr., Italy, Japan, Pol. v. Ger.), 1923 PCIJ (ser. A) No. 1, at 23–24 (Aug. 17).

45 United States Diplomatic and Consular Staff in Tehran (U.S. v. Iran), 1980 ICJ Rep. 3, 40 (May 24).

46 See, e.g., Koskenniemi Study, supra note 1, at 65–70 (three meanings); Bruno Simma & Dirk Pulkowski, Of Planets and the Universe: Self Contained Regimes in International Law, 17 Eur. J. Int’l L. 483, 492–93 (2006) (reserving term for subsystems “that embrace a full, exhaustive and definitive, set of secondary rules”).

47 Koskenniemi Study, supra note 1, at 68, 71.

48 Id. at 84–85.

49 Indeed, international law has already shifted once in the way it doctrinally categorizes regulatory takings. Whereas formerly these were conceived (and by some scholars still are conceived) as part of the law of state responsibility for injuries to aliens, now they are part of, at a minimum, the law of foreign investment and, as discussed below, other doctrinal areas.

50 ILC, Fragmentation of International Law: Difficulties Arising from the Diversification and Expansion of International Law: Report of the Study Group of the International Law Commission, UN Doc. A/CN.4/L.702, at 12 (July 18, 2006) [hereinafter ILC Study Group Report].

51 Koskenniemi Study, supra note 1, at 14.

52 MOX Plant (Ir. v. UK), Provisional Measures, para. 51 (ITLOS Dec. 3,2001), 41 ILM 405,413 (2002). The treaties are the UN Convention on the Law of the Sea (UNCLOS), the Convention for the Protection of the Marine Environment of the North-East Atlantic (the OSPAR Convention), the Treaty Establishing the European Economic Community, and the Treaty Establishing the European Atomic Energy Community; the mechanisms are the International Tribunal for the Law of the Sea (ITLOS), the arbitral tribunal under OSPAR, the arbitral tribunal under UNCLOS, and the European Court of Justice.

53 Among recent works, see, for example, Lloyd, Gruber, Ruling the World: Power Politics and the Rise of Supranational Institutions (2000); Ronald, B. Mitchell, Intentional Oil Pollution at Sea: Environmental Policy and Treaty Compliance 5267 (1994); Oran, R. Young, Governance in World Affairs 10832 (1999).

54 See, e.g., Judith, Goldstein & Lisa, L. Martin, Legalization, Trade Liberalization, and Domestic Politics: A Cautionary Note , 54 Int’l Org. 603 (2000) (domestic actors); Peter, Haas, Epistemic Communities and International Policy Coordination , 46 Int’l Org. 1 (1992) (transnational actors); Barbara, Koremenos, Charles, Lipson, & Duncan, Snidal, The Rational Design of International Institutions , 55 Int’l Org. 761 (2001) (rational choice).

55 For a recent example from the insurance context, see Sempra Energy Intl v. Argentine Republic , ICSID No. ARB/02/16 (Sept. 28, 2007), available at <http://ita.law.uvic.ca> .

56 Higgins, supra note 16, at 334–39.

57 See, e.g., E., José Alvarez, International Organizations as Law-Makers 47278 (2005) (on the delegation of decisions by treaty drafters to decision-making bodies).

58 Fortier & Drymer, supra note 12, at 295–96.

59 Alvarez, supra note 57, at 472–73.

60 Vienna Convention on the Law of Treaties, Art. 31, opened for signature May 23, 1969, 1155 UNTS 331.1 appreciate this point from Robert Howse.

61 Daniel, Bodansky, The Legitimacy of International Governance: A Coming Challenge for International Environmental Law? 93 AJIL 596, 601 (1999); cf. Ian, Hurd, Legitimacy and Authority in International Politics , 53 Int’l Org. 379, 381 (1999) (defining legitimacy as “the normative belief by an actor that a rule or institution ought to be obeyed”).

62 Bodansky, supra note 61, at 612.

63 See Joseph, H. H. Weiler, The Transformation of Europe , 100 YALE L.J. 2403, 2429 (1991) (demonstrating how ECJ decisions established the Court’s legitimacy over time).

64 Id. at 2469; see also Thomas, M. Franck, The Power of Legitimacy Among Nations 1819 (1990).

65 See Laurence, R. Heifer & Anne-Marie, Slaughter, Toward a Theory of Effective Supranational Adjudication , 107 Yale L.J. 273, 284 (1997).

66 I appreciate this insight from Yuval Shany and John Crook.

67 As for the Energy Charter Treaty, its arbitral tribunals have considered only two claims of expropriation, one concerning Latvia and the other concerning Kyrgystan, rejecting both. For an endorsement of the control test component of the consensus position, see Nykomb Synergetics Tech. Holding AB v. Republic of Latvia §4.3.1 (Stockholm Chamber of Comm. Dec. 16, 2003), available at <http://ita.law.uvic.ca>. For a discussion, see Kaj, Hober, The Energy Charter TreatyAn Overview , 8 J. World invest. & Trade 323 (2007). A broader review to consider private insurance regimes would be warranted though methodologically complex.

68 22 U.S.C. §2191 (2006); see also Maura, B. Perry, A Model for Efficient Foreign Aid: The Case for the Political Risk Insurance Activities of the Overseas Private Investment Corporation , 36 Va. J. Int’l L. 511, 52328 (1996).

69 22 U.S.C. §2194(a)(l)(B) (2006).

70 22 U.S.C. §2198(b) (2006).

71 Compare id. with 26 U.S.C. §1351(b) (2006) (defining “foreign expropriation loss” for tax purposes), and Foreign Sovereign Immunities Act, 28 U.S.C. §1605 (a) (3) (2006) (limiting immunity of foreign states in expropriation claims), and Second Hickenlooper Amendment, 22 U.S.C. §2370(e)(2) (2006) (prohibiting federal courts from relying upon act of state ground in expropriation claims), and First Hickenlooper Amendment, 22 U.S.C. §2370(e)(l) (2006) (prohibiting foreign assistance to state that has expropriated U.S. property).

72 See Overseas Private Investment Corporation [OPIC], Notice of Adoption of Form Contract, 51 Fed. Reg. 3438 (Jan. 27, 1986) [hereinafter OPIC Form Contract] (indicating that “[individual contracts, of course, may deviate from the standard form”); Bechtel Enterprises Int’l v. Overseas Private Inv. Corp., AAA No. 50 T195 00509 02 (Am. Arb. Ass’n Sept. 3, 2003), available at <http://www.opic.gov/insurance/claims/awards/documents/2294l71_l.pdf> (showing revisions in policy as events unfolded).

73 OPIC model contract §1.13, quoted in Vance, R. Koven, Expropriation and theJurisprudenceof OPIC , 22 Harv. Int’l L.J. 269, 32122 (1981).

74 Id. at 322 (excluding “any law, decree, regulation or administrative action… which is not by its express terms for the purpose of nationalization, confiscation or expropriation (including… intervention, condemnation or other taking), is reasonably related to constitutionally sanctioned governmental objectives, is not arbitrary, is based upon a reasonable classification of entities to which it applies and does not violate… international law”).

75 Id. at 323.

76 Revere Copper & Brass, Inc. v. OPIC, AAA No. 1610 0137 76 (Aug. 24, 1978), 17 ILM 1321 (1978).

77 Id. at 1350.

78 Higgins, supra note 16, at 335. For the contract language, see Revere Copper, 17 ILMat 1322 (quoting § 1.15 of the contract).

79 National Legal Provision for Protection of Foreign Investment, 1979 Digest §5, at 1217–22 (statute only addresses cases where foreign government “through the total cancellation or nullification of a contract, effectively took the property of an American investor,” id. at 1221).

80 Koven, supra note 73, at 280–82.

81 OPIC Form Contract, supra note 72, §4.01, at 3446.

82 Id. at 3440–41.

83 Waste Mgmt, Inc. v. Mexico, ICSID No. ARB(AF)/00/3 (NAFTA Ch. 11 Arb. Trib. Apr. 30, 2004), 43 ILM 967, 1002, para. 175 (2004) (saying “it is one thing to expropriate a right under a contract and another to fail to comply with the contract”); McHarg, Roberts, Wallace, & Todd v. Islamic Republic of Iran, 13 Iran-U.S. Cl. Trib. Rep. 286,302 (1986) (rejecting claim of expropriation of shares from evidence of contract breach alone); Restatement, supra note 23, §712 cmt. h & reporters’ n.8. Tribunals have found expropriations when the plaintiff had “rights of a proprietary nature,” such as those in concession agreements. 1 Oppenheim’s International Law 928 (Robert, Jennings & Arthur, Watts eds., 9th ed. 1992).

84 OPIC Memorandum of Determinations: Expropriation Claim of MidAmerican Energy Holdings Company (Nov. 1999), available at <http://www.opic.gov/insurance/claims/report/documents/claim_mid_american.pdf>.

85 Bechtel Enterprises, supra note 72, at 24–25.

86 See the Enron and Ponderosa cases cited supra note 13.

87 OPIC Memorandum of Determination: Expropriatory Action Claim of Cabot International (Dec. 27,1980) (on file with author).

88 OPIC Memorandum of Determinations: Expropriation Claim of Science Applications International Corporation (July 12, 2004), available at <http://www.opic.gov/insurance/claims/report/documents/INTESAMoDv7_FINAL.pdf>.

89 See International Bank v. OPIC , 11 ILM 1216, 122425 (1972), where the panel relied on the limits to the definition of expropriation and emphasized that the government had not taken the property of the claimant.

90 See Pablo, M. Zylberglait, OPICs Investment Insurance: The Platypus of Governmental Programs and Its Jurisprudence , 25 Law & Pol’y Int’l Bus. 359, 367 (1993) (citing OPIC senior counsel for proposition that OPIC is eager to pay claims despite contractual terms); see also id. at 385–86 (citing an example of interpretation generous to claimant).

91 22 U.S.C. §2191 (2006); see also Peter, R. Gilbert, Expropriations and the Overseas Private Investment Corporation , 9 Law & Pol’y Int’l Bus. 515, 538 (1977).

92 Asian Development Bank, Review of the Partial Risk Guarantee of the Asian Development Bank, para. 27 (2000), available at <http://www.adb.org/Documents/Policies/PRG/prg203.asp> .

93 Gilbert, supra note 91, at 534–35, 547; Perry, supra note 68, at 554-58. As these and other commentators point out, OPIC coverage may also deter nationalizations in the first place.

94 See, e.g., Investment Incentive Agreement, U.S.-Cambodia, Art. 2(c), (d), Aug. 4, 1995, availabledr<http://www.opic.gov/doingbusiness/ourwork/asia/documents/Cambodia-1995.pdf> .

95 See Methanex Corp. v. United States (NAFTA Ch. 11/UNCITRAL Aug. 3, 2005), 44 ILM 1345, 1456 (2005) (Final Award); Campbell Mclachlan, Laurence Shore, & Matthew Weiniger, International Investment Arbitration: Substantive Principles 297 (2007). It might be a form of state practice exhibiting the U.S. understanding of expropriation, but the contradictory signal sent by the State Department in the Revere Copper episode suggests otherwise.

96 For earlier treatments, compare Higgins, supra note 16, at 335, with Rudolf Dolzer, Indirect Expropriation of Alien Property, 1 Icsid Rev. 41, 57–58 (1986).

97 International Claims Settlement Act of 1949, Pub. L. No. 81-455, 64 Stat. 12 (1950) (codified as amended at 22 U.S.C. §§1621–1645 (2006)).

98 22U.S.C. §164lb (2006).

99 22 U.S.C. § 1642c, 1645b (2006).

100 22 U.S.C. §1623(a)(2)(B) (2006).

101 See, e.g., 22 U.S.C. §§l641c, 1642c, 1643b, 1644b, 1645b (2006).

102 See, e.g., Foreign Claims Settlement Commission of the United States, Decisions and Annotations 278, 285, 394, 496, 548 (1968) [hereinafter FCSC Decisions and Annotations].

103 Edward, D. Re, The Foreign Claims Settlement Commission: Its Functions and Jurisdiction , 60 Mich. L. Rev. 1079, 1101 (1962) (by then-chair of FCSC).

104 Settlement Agreement in Claims of Less than $250,000, May 13, 1990, 25 Iran-U.S. CI. Trib. Rep. 327 (1990). For some examples where the FCSC did not always do so, see Richard, B. Lillich & David, J. Bederman, Jurisprudence of the Foreign Claims Settlement Commission: Iran Claims , 91 AJIL 436, 442, 45556 (1997). Congress has defined property in the International Claims Settlement Act in a way that may exclude from coverage certain acts that would be takings under customary international law. See David, J. Bederman, Creditors’’ Claims in International Law , 34 Int’l Law. 235, 23941 (2000) (concerning various types of creditors’ claims).

105 In most of these, the Commission had evidence of a decree of confiscation but in others found a taking absent such a decree. See, e.g., FCSC Decisions and Annotations, supra note 102, at 230 (Hungary), 513 (Poland).

106 Claim of Alexander Feigler, Dec. No. CZ–2714 (FCSC Oct. 11,1961), reprinted in FCSC Decisions and Annotations, supra note 102, at 422, 424; see also FCSC Decisions and Annotations at 417.

107 FCSC Decisions and Annotations, supra note 102, at 416; see also Weston, supra note 21, at 163– 65 (noting at 164 that “the interposition of a State administrator… is to be considered a ‘constructive taking’ whenever it falls short of being truly custodial in character”).

108 Claim of Jan Glowacki, Dec. No. PO–1636 (FCSC Oct. 2, 1963), reprinted in FCSC Decisions and Annotations, supra note 102, at 516,518. See also FCSC Decisions and Annotations at 519 –20 on other cases. The Glowacki case cites no legal sources for this view.

109 Claim of Jozsef Chobady, Dec. No. HUNG–716 (FCSC Feb. 5,1958), reprinted in FCSC Decisions and Annotations, supra note 102, at 232, 233.

110 See also Muresan Claim (FCSC Feb. 5, 1958), 26 ILR 294, 295 (same regarding Romania); Evanoff Claim (FCSC Aug. 13, 1958), 26 ILR 301, 302 (same regarding Bulgaria).

111 See, e.g., Claim of Erna Spielberg, Dec. No. CZ–2466, 14 FCSC, Semiann. Rep. 146 (Jan.–June 1961) (denial of claim due to loss of property after refusal to grant export license).

112 1 Richard, B. Lillich & Burns, H. Weston, International Claims: Their Settlement by Lump Sum Agreements 16970 (1975); see also Burns, H. Weston, Richard, B. Lillich, & David, J. Bederman, International Claims: Their Settlement by Lump Sum Agreements, 19751995 (1999) (reprinting agreements, including 1968 Italy-Romania agreement, at 159 (“measures of nationalization, expropriation, placement in trust or any other similar legislative or administrative measure”), and 1971 Canada-Poland agreement, at 183 (“nationalized or otherwise taken”)).

113 Lillich & Weston, supra note 112, at 173.

114 Richard, B. Lillich, International Claims: Their Adjudication by National Commissions 115 (1962); see id. at 104–16.

115 Ford, Charles Redick, The Jurisprudence of the Foreign Claims Settlement Commission: Chinese Claims , 67 AJIL 728, 73536 & n.53 (1973).

116 Lillich & Bederman, supra note 104, at 436, 437 & n.7.

117 FCSC Decisions and Annotations, supra note 102, at 157–58, 297, 457.

118 See, e.g., Redick, supra note 115, at 729 ($197 million out of $307 million in claims); Jeffrey, J. Brown, The Jurisprudence of the Foreign Claims Settlement Commission: Vietnam Claims , 27 Va. J. Int’l L. 99, 10001 (1986) ($99 million out of $110 million in claims). On the unusual case of Czechoslovakia, where the United States had access to a small amount of Czech assets but then later concluded a large settlement agreement, see Vratislav, Pechota, The 1981 U.S.-Czechoslovak Claims Settlement Agreement: An Epilogue to Postwar Nationalization and Expropriation Disputes , 76 AJIL 639 (1982).

119 Redick, supra note 115, at 735–36.

120 Protocol to the Convention for the Protection of Human Rights and Fundamental Freedoms, Art. 1, Mar. 20, 1952, Europ. TS No. 9, 213 UNTS 262 [hereinafter Protocol 1]. For background on the disagreements, see Brian, A. W. Simpson, Human Rights and the End of Empire 754807 (2001).

121 Andrew, Moravcsik, The Origins of Human Rights Regimes: Democratic Delegation in Postwar Europe , 54 Int’l Org. 217 (2000).

122 Convention for the Protection of Human Rights and Fundamental Freedoms, pmbl., Nov. 4, 1950, Europ. TS No. 5, 213 UNTS 221; see also Statute of the Council of Europe, Art. 1(a), Europ. TS No. 1, 87 UNTS 103.

123 See, for example, Tyrer v. United Kingdom, 26 Eur. Ct. H.R. (ser. A) at 15–16(1978) (introducing the “living instrument” concept in para. 31); and, ironically, Banković v. Belgium, 2001–XII Eur. Ct. H.R. 335, 353. See generally Alastair, Mowbray, The Creativity of the European Court of Human Rights , 5 Hum. Rts. L. Rev. 57 (2005).

124 Simpson, supra note 120, at 762–65, 781–82, 784–86, 792, 796–97.

125 Helen, Mountfield, Regulatory Expropriations in Europe: The Approach of the European Court of Human Rights , 11 N.Y.U. Envt’l L.J. 136, 146 (2002).

126 Brigitte, Stern, Le droit de propriété, lexpropriation et la nationalisation dans la Convention européenne des droits de lhomme , 17 Droit et Pratique du Commerce International 394, 403 (1991).

127 Sporrong & Lönnroth v. Sweden, 52 Eur. Ct. H.R. (ser. A) (1982).

128 Id. at 26, 28, paras. 69, 73. See generally Camilo, B. Schutte, The European Fundamental Right of Property 5158 (2004).

129 See, e.g., Pincová v. Czech Republic, 2002–VIII Eur. Ct. H.R. 311, 328; Yves, Winisdoerffer, Margin of Appreciation and Article 1 of Protocol No. 1 , 19 Hum. Rts. L.J. 18 (1998). In Papamichalopoulos v. Greece, 260 Eur. Ct. H.R. (ser. A) 55, 69–70 (1993), the Court found the complete loss of control of property a deprivation under Protocol 1 and did not balance it against governmental interests. See Manlio, Frigo, Peaceful Enjoyment of Possessions, Expropriation and Control of the Use of Property in the System of the European Convention on Human Rights , 2000 Ital. Y.B. Int’l L. 45, 5254.

130 Holy Monasteries v. Greece, 301 Eur. Ct. H.R. (ser. A) 1, 34–35 (1994).

131 See Winisdoerffer, supra note 129, at 19; Mountfield, supra note 125, at 146; Elyse, M. Freeman, Note, Regulatory Expropriation Under NAFTA Chapter 11: Some Lessons from the European Court of Human Rights , 42 Colum. J. Transnat’l L. 177, 19798 (2003).

132 Stern, supra note 126, at 423.

133 For statistics through 2005, see Henrik, D. Ploeger & Daniëlle, A. Groetelaers, The Importance of the Fundamental Right to Property for the Practice of Planning: An Introduction to the Case Law of the European Court of Human Rights on Article 1, Protocol 1 , 15 Eur. Planning Stud. 1423, 142526 (2007).

134 Allard v. Sweden, 2003–VII Eur. Ct. H.R. 207 (demolishing house without adequate process); Pincová, supra note 129 (authorizing forced return of land acquired under Communist regime); Kliafas v. Greece, App. No. 66810/01 (July 8,2004), at <http://www.echr.coe.int/echr/> (requiring surrender of portion of accountants’fees to government).

135 Stretch v. United Kingdom, App. No. 44277/98 (June 24, 2003), at http://www.echr.coe.int/echr/ (denying ability to renew a lease despite legitimate expectation of tenant); Assymomitis v. Greece, App. No. 67629/01 (Oct. 14, 2004), at id. (suspending building permission by town council despite administrative court decisions declaring permission valid).

136 Pine Valley Devs. Ltd. v. Ireland, 222 Eur. Ct. H.R. (ser. A) at 23 (1991); see also Kjartan Asmundsson v. Iceland, 2004–IX Eur. Ct. H.R. 307 (total termination of disability pension based on changed standard of assessment a violation); Kopecky v. Slovakia, 2004–IX Eur. Ct. H.R. 125. On the competing and inconsistent notions of property in the case law, see generally Tom, Allen, Compensation for Property Under the European Convention on Human Rights , 28 Mich. J. Int’l L. 287 (2007).

137 See generally Francis, G. Jacobs & Robin, C. A. White, The European Convention on Human Rights 37–38, 30609 (2d ed. 1996); Sporrong, supra note 127, at 26, para. 69 (stating that “the search for [the fair] balance is inherent in the whole of the Convention and is also reflected in the structure of [Protocol 1]”).

138 See, e.g., United Communist Party of Turk. v. Turkey, 1998-1 Eur. Ct. H.R. 1, 22.

139 Allen, supra note 136, at 300–02.

140 James v. United Kingdom, 98 Eur. Ct. H.R. (ser. A) 9, 39 (1986).

141 Id. at 39, para. 63.

142 Id. at 39–40, para. 66.

143 Stran Greek Refineries v. Greece, 301 Eur. Ct. H.R. (ser. A) 61, 87–88 (1994); see also Papamichalopoulos v. Greece (Article 50), 330 Eur. Ct. H.R. (ser. A) 45, 59–60, para. 36 (1995) (citing non-ECHR case law as “precious source of inspiration” to determine compensation for illegal expropriation).

144 Frigo, supra note 129, at 65; see also Merrills, J. G., The Development of International Law by The European Court of Human Rights 217 (1993).

145 For the Court’s basic approach, see Kopecky, supra note 136, at 139–41.

146 Eric, Voeten, The Politics of International Judicial Appointments: Evidence from the European Court of Human Rights , 61 Int’l Org. 669, 68897 (2007). I appreciate thoughts on this point from Tom Allen.

147 See, e.g., Paolo, G. Carozza, Subsidiarity as a Structural Principle of International Human Rights Law , 97 AJIL 38, 7376 (2003); Heifer & Slaughter, supra note 65, at 300–23.

148 On the Court’s changed attitudes, see Henry, G. Schermers, Acceptance of International Supervision of Human Rights , 12 Leiden J. Int’l L. 821 (1999).

149 See generally Allen, supra note 136.

150 See, e.g., Ruiz, Hélène Fabri, The Approach Taken by the European Court of Human Rights to the Assessment of Compensation forRegulatory Expropriationsof the Property of Foreign Investors , 11 N.Y.U. Envt’l L.J. 148, 173 (2002).

151 Treaty Establishing the European Community, Art. 2, Nov. 10, 1997, 1997 O.J. (C 340) 3, 298 UNTS 11.

152 The closest is Article 222, now Article 295, which says that the Treaty will not prejudice domestic rules on property ownership. On the ECJ’s reluctance to apply that article, see Fiona, Campbell-White, Property Rights: A Forgotten Issue Under the Union , in The European Union and Human Rights 249 (Nanette, A. Neuwahl & Allan, Rosas eds., 1995).

153 Case 11 /70, Internationale Handelsgesellschaft v. Einfuhr- und Vorratsstelle für Getreide, 1970 ECR 1125.

154 Case 4/73, Nold v. Comm’n, 1974 ECR 491.

155 On the Court’s methodology, see Joseph, H. H. Weiler, Fundamental Rights and Fundamental Boundaries: On Standards and Values in the Protection of Human Rights , in The European Union and Human Rights, supra note 152, at 51, 6274.

156 Case 44/79, Hauer v. Land Rheinland-Pfalz, 1979 ECR 3727, 3746, para. 19.

157 Id. at 3747, para. 23.

158 Abr., Jochen Frowein, The Protection of Properly , in The European System for the Protection of Human Rights 515, 530 (Macdonald, R. St. J., Matscher, F., & Petzold, H. eds., 1993); Frigo, supra note 129, at 45–46.

159 Hauer, 1979 ECR at 3749, para. 29.

160 Consolidated Version of the Treaty on European Union, Art. 6, Oct. 2, 1997, 37 ILM 56, 69 (1998). See generally Koen, Lenaens, Respect for Fundamental Rights as a Constitutional Principle of the European Union , 6 Colum. J. Eur. L. 1 (2000).

161 Charter of Fundamental Rights of the European Union, Art. 17(1), Dec. 7, 2000,2000 O.J. (C 364) 1,12, reprinted in 40 ILM 266, 269 (2001):

Everyone has the right to own, use, dispose of and bequeath his or her lawfully acquired possessions. No one may be deprived of his or her possessions, except in the public interest and in the cases and under the conditions provided for by law, subject to fair compensation being paid in good time for their loss. The use of property may be regulated by law in so far as is necessary for the general interest.

See also id., pmbl. para. 5 on the source of the rights.

162 Case C-265/87, Schrader HS Kraftfutter GmbH v. Hauptzollamt Gronau, 1989 ECR 2237 (cereals); Joined Cases T–466, 469, 473, 474, & 477/93, O’Dwyer v. Council, 1995 ECR 11–2071 (milk production quotas); Joined Cases C–154 & 155/04, Queen v. Sec’y of State for Health, 2005 ECR I–6451 (food supplements).

163 Case C–293/97, Queen v. Sec’y of State for Env’t ex parte Standley, 1999 ECR I–2603, 2647, para. 54. The Court has similarly rejected challenges based on the claim that regulations violate another fundamental principle, that of the protection of legitimate expectations, emphasizing the broad powers of the Community to make constant changes to regulations in the common agricultural policy and the lack of any vested right to advantages enjoyed at a particular time. Case C-350/88, Societe francaise de Biscuits Delacre v. Comm’n, 1990 ECR I–395, 426, para. 36.

164 Joined Cases C–20 & 64/00, Booker Aquaculture v. Scottish Ministers, 2003 ECR I–7411.

165 Case 280/93, Germany v. Council, 1994 ECR I–4973, 5065, para. 78 (citing the “social function” of the right to property); Case 122/95, Germany v. Council, 1998 ECR 1-973, 1019-20. For one German critique, see Hermann-Josef, Blanke, Protection of Fundamental Rights Afforded by the European Court of justice in Luxembourg , in Governing Europe Under a Constitution 265, 27577 (Herm.-Josef, Blanke & Stelio, Mangiameli eds., 2006).

166 Case 5/88, Wachauf v. Germany, 1989 ECR 2609, 2639, para. 19.

167 Id. at 2640, para. 22.

168 John A. Usher, General Principles of EC Law 99 (1998).

169 See the discussion in de, Bruno Witte, The Past and Future Role of the European Court of Justice in the Protection of Human Rights , in The EU And Human Rights 859, 86162 (Philip, Alston ed., 1999).

170 See Weiler, supra note 155, at 66–76; de Witte, supra note 169, at 869–71, 882.

171 Weiler, supra note 155, at 54–56; de Witte, supra note 169, at 881–82.

172 For one academic critique, see Blanke, supra note 165.

173 See generally Heifer & Slaughter, supra note 65; see also Weiler, supra note 63.

174 See, e.g., George, H. Aldrich, The Jurisprudence Of The Iran-United States Claims Tribunal 17172 (1996).

175 Declaration of the Government of the Democratic and Popular Republic of Algeria, U.S.-Iran, Jan. 19,1981, 20ILM 224,224 (1981) [ hereinafter Algiers Commitments Declaration]; see also Case A/18 Concerning the Question of Jurisdiction over Claims of Persons with Dual Nationality, 5 Iran-U.S. CI. Trib. Rep. 251,261–62 (1984) [hereinafter Dual Nationality].

176 Declaration of the Government of the Democratic and Popular Republic of Algeria Concerning the Settlement of Claims, Art. 11(1), 20 ILM 230, 231 (1981) [hereinafter Algiers Claims Declaration].

177 Charles, N. Brower & Jason, D. Brueschke, The Iran-United States Claims Tribunal 37982 (1998).

178 Algiers Claims Declaration, supra note 176, Art. V, at 232.

179 For a full review of the case law on expropriations, see ALDRICH, supra note 174, at 171–218; Brower & Brueschke, supra note 177, at 369–471.

180 Tippetts, Abbett, McCarthy, Stratton v. TAMS-AFFA Consulting Engineers of Iran, 6 Iran-U.S. Cl. Trib. Rep. 219, 225–26 (1984).

181 Starrett Housing Corp. v. Iran, 4 Iran-U.S. CI. Trib. Rep. 122, 154 (1983); see id. at 154–56.

182 27 Iran-U.S. CI. Trib. Rep. 64, 96 (1991).

183 For a summary of the Tribunal’s views, see Aldrich, supra note 174, at 217–18.

184 Starrett Housing, 4 Iran-U.S. Cl. Trib. Rep. at 156; see also Motorola v. Iran Nat’l Airlines, 19 Iran-U.S. CI. Trib. Rep. 73, 8587 (1988).

185 Sea-Land Serv. v. Iran, 6 Iran-U.S. CI. Trib. Rep. 149, 166 (1984).

186 1 Iran-U.S. CI. Trib. Rep. 499, 505 (1982).

187 Phillips Petroleum v. Iran, 21 Iran-U.S. CI. Trib. Rep. 79, 115 (1989) (stating that “a government’s liability to compensate for expropriation of alien property does not depend on proof that the expropriation was intentional”). Aldrich, supra note 174, at 206 – 07, has pointed out that subsequent opinions did not cite the Sea-Land standard.

188 Maurizio Brunetti, The Iran—United States Claims Tribunal, NAFTA Chapter 11, and the Doctrine of Indirect Expropriation, 2 Chi. J. Int’l L. 203, 211 (2001).

189 Brower & Brueschke, supra note 177, at 440, 666.

190 See David, D. Caron, The Nature of the Iran-United States Claims Tribunal and the Evolving Structure of International Dispute Resolution , 84 AJIL 104, 13137 (1990).

191 See Dual Nationality, supra note 175, at 261–62; Aldrich, supra note 174, at 4 – 6; The Claims Settlement Agreement and Establishment of the Iran-United States Claims Tribunal , in Revolutionary Days: The Iran Hostage Crisis and the Hague Claims Tribunal: A Look Back 91, 101 (Andreas, F. Lowenfeld, Lawrence, W. Newman, & John, M. Walker Jr. eds., 1999) (remarks of Mark, B. Feldman).

192 For a critique of the selection process of the Strasbourg court, see Jutta, Limbach et al., Judicial Independence: Law And Practice of Appointments to the European Court of Human Rights 9 (2003).

193 Matti, Pellonpaa, The Process of Decision-Making , in The Iran-United States Claims Tribunal and the Process of International Claims Resolution 233, 23638 (David, D. Caron & John, R. Crook eds., 2000); see also “A Regime for Bilateral Investment Treaties?” infra.

194 Charles, N. Brower, The Interpersonal Dynamics of Arbitral Decision-Making (I), in The Iran-United States Claims Tribunal and the Process of International Claims Resolution, supra note 193, at 249, 24950 ; Nils, Mangård, The Interpersonal Dynamics of Arbitral Decision-Making (II), in id. at 253, 254.

195 Algiers Commitments Declaration, supra note 175, at 226, para. 7.

196 In 1992, once the Tribunal had adjudicated nearly all private cases against Iran, Iran stopped replenishing the account until after the Tribunal issued an order in 2004 demanding it. Iran-U.S. C.T. Dec. No. 132–A33–FT (Sept. 9, 2004), available at <http://www.iusct.com>.

197 Brower & Brueschke, supra note 177, at 661.

198 Mangård, supra note 194, at 259; see also Establishment of the Claims Tribunal, in Revolutionary Days, supra note 191, at 116, 132–33 (remarks of Arthur W. Rovine).

199 See infra pp. 517–18.

200 William, J. Clinton, Message to the Congress Transmitting the NAFTA Legislation, 29 Weekly Comp. Pres. Docs. 2254, 2255 (Nov. 4, 1993).

201 North American Free Trade Agreement, Art. 102(1), U.S.-Can.-Mex., Dec. 17, 1992, 32 ILM 289, 297(pts. 1–3), 32 ILM 605 (pts. 4-8) (1993) [hereinafter NAFTA].

202 Clinton, supra note 200, at 2254.

203 Maxwell, A. Cameron & Brian, W. Tomlin, The Making of Nafta: How the Deal was Done 4042 (2000); Gustavo, Vega C. & Gilbert, R. Winham, The Role of NAFTA Dispute Settlement in the Management of Canadian, Mexican and U.S. Trade and Investment Relations , 28 Ohio N.U. L. Rev. 651, 67780 (2002).

204 Atik, supra note 15, at 220–21.

205 José, E. Alvarez, Critical Theory and the North American Free Trade Agreements Chapter Eleven , 28 U. Miami Inter-Am. L. Rev. 303, 30405 (1997); Atik, supra note 15, at 220–21.

206 NAFTA, supra note 201, Art. 1110, 32 ILM at 641 (emphasis added).

207 Ethyl Corp. v. Canada (NAFTA Ch. 11 Arb. Trib. June 24, 1998), available at <http://ita.law.uvic.ca>; Metalclad Corp. v. Mexico, supra note 11.

208 For the draft treaty, see supra note 26.

209 Data from U.S. Dep’t of State, NAFTA Investor-State Arbitrations, at <http://www.state.gov/s/l/c3439.htm>, and NAFTA Claims (Jan. 29, 2008) at <http://www.naftaclaims.com>. The decisions in two cases that include an expropriation claim, Archer Daniels Midland v. Mexico and Corn Products v. Mexico, are not public.

210 Investors have prevailed in only four cases—Feldman v. Mexico, ICSID No. ARB(AF)/99/l (NAFTA Ch. 11 Arb. Trib. Dec. 16, 2000), 42 ILM 625 (2003); S.D. Myers v. Canada (NAFTA Ch. 11 Arb. Trib. Nov. 12, 2000), 40 ILM 1408 (2001) (Partial Award); Metalclad Corp. v. Mexico, supra note 11; Pope & Talbot v. Canada (NAFTA Ch. 11 Arb. Trib. June 26, 2000) (Interim Award), available at <http://ita.law.uvic.ca>.

211 Feldman, 42 ILM at 645, para. 100.

212 Pope & Talbot, para. 102 (footnotes omitted); see also S.D. Myers, 40 ILM at 1440, para. 283 (stating that” [a]n expropriation usually amounts to a lasting removal of the ability of an owner to make use of its economic rights although it may be… appropriate to view a deprivation as amounting to an expropriation, even if it were partial or temporary”; and finding Canada’s eighteen-month closure of the U.S. border to exports of chemicals not an expropriation); Waste Mgmt. v. Mexico, supra note 83, 43 ILM at 999, para. 160 (noting that NAFTA only compensates in the case of “arbitrary intervention by the State amounting to a virtual taking or sterilising of the enterprise”).

213 S.D. Myers, 40 ILM at 1440, paras. 281–82.

214 Methanex, supra note 95, 44 ILM at 1456, pt. IV, ch. D, para. 7.

215 Fireman’s Fund Ins. Co. v. Mexico, para. 176 (NAFTA Ch. 11 Arb. Trib. July 17,2006), available at <http://ita.law.uvic.ca>; see also S.D. Myers, 40 ILM at 1440, paras. 280, 281 (noting in passing the need to examine the “purpose and effect” of governmental measures and also stating that expropriation involved “transferring ownership of… property to another person, usually the authority that exercised its dejure or de facto power to do the ‘taking’”).

216 Metalclad, supra note 11, 40 ILM at 50, para. 103.

217 Mexico v. Metalclad, 2001 BCSC 664, para. 99, available at <http://ita.law.uvic.ca>; see id., paras. 77–105.

218 Feldman, supra note 110, 42 ILM at 656–57.

219 Waste Mgmt., supra note 83, 43 ILM at 999, para. 159.

220 GAMI Invs., Inc. v. Mexico (NAFTA Ch. 11 Arb. Trib. Nov. 15, 2004), 44 ILM 545, 566–67, para. 131 (2005).

221 Feldman, 42 ILM at 648.

222 Waste Mgmt., 43 ILM at 1002.

223 Metalclad, 40 ILM at 50, 51, paras. 106, 109; see also Gary, S. Sampliner, Arbitration of Expropriation Cases Under U. S. Investment TreatiesA Threat to Democracy or the Dog That Didnt Bark? 18 Icsid Rev. 1, 1922 (2003).

224 See Scott, Sinclair, Canadian Centre for Policy Alternatives, NAFTA Chapter 11 Investor-State Disputes (2007), at <http://policyalternatives.ca/documents/National_Office_Pubs/2007/NAFTA_Dispute_Table_March2007.pdf>.

225 Sampliner, supra note 223, at 35–39; see also Trade Act of 2002, 19 U.S.C. §3802(b)(3)(Supp. 2 2002).

226 NAFTA, supra note 201, Art. 1131 (2) (“An interpretation by the Commission of a provision of this Agreement shall be binding on a Tribunal established under this Section.”).

227 NAFTA FTC, Notes of Interpretation of Certain Chapter 11 Provisions, para. 2(2) (July 31,2001), available at <http://www.international.gc.ca/trade-agreements-accords-commerciaux/disp-diff/nafta-interpr.aspx?lang=en>.

228 Pope & Talbot Inc. v. Canada (NAFTA Ch. 11 Arb. Trib. May 31, 2002), 41 ILM 1347, 1352–57 (2002) (Award).

229 Mondev Int’l Ltd. v. United States, ICSID No. ARB(AF)/99/2 (NAFTA Ch. 11 Arb. Trib. Oct. 11, 2002), 42 ILM 85, 108 (2003).

230 Loewen Group, Inc. v. United States, ICSID No. ARB(AF)/98/3 (NAFTA Ch. 11 Arb. Trib. June 26, 2003), ILM 811, 832 (2003); ADF Group Inc. v. United States, ICSID No. ARB(AF)/00/l, paras. 175–78 (NAFTA Ch. 11 Arb. Trib. Jan. 9,2003), available at <http://ita.law.uvic.ca>; Waste Mgmt., supra note 83,43 ILM at 984 – 86; Methanex, supra note 95,44 ILM at 1352–55; Int’l Thunderbird Gaming Corp. v. Mexico 62 – 63 (NAFTA Ch. 11 Arb. Trib. Jan. 26, 2006), at <http://ita.law.uvic.ca>.

231 Vienna Convention on the Law of Treaties, supra note 60, Art. 31(3)(b).

232 Neerv. Mexico, No. 136 (U.S.-Mex. General Claims Comm’n Oct. 15, 1926),21 AJIL555 (1927); See Ian, A. Laird, Betrayal, Shock and OutrageRecent Developments in NAFTA Article 1105 , in Nafta Investment Law and Arbitration: Past Issues, Current Practice, Future Prospects 49, 7374 (Todd, Weiler ed., 2004).

233 David, A. Gantz, The Evolution of FTA Investment Provisions: From NAFTA to the United States–Chile Free Trade Agreement , 19 Am. U. Int’l L. Rev. 679, 74042 (2004).

234 Martin, Hunter & Alexei, Barbuk, Procedural Aspects of Non-Disputing Party Interventions in Chapter 11 Arbitrations , in NAFTA Investment Law and Arbitration, supra note 232, at 151, 15161.

235 U.S. Model Bilateral Investment Treaty, Annex B(4) (Nov. 2004), available at <http://www.ustr.gov/assets/Trade_Sectors/Investment/Model_BIT/asset_upload_file847_6897.pdf>:

  • (a)

    (a) The determination of whether an action or series of actions by a Party, in a specific fact situation, constitutes an indirect expropriation, requires a case-by-case, fact-based inquiry that considers, among other factors:

    • (i)

      (i) the economic impact of the government action, although the fact that an action or series of actions by a Party has an adverse effect on the economic value of an investment, standing alone, does not establish that an indirect expropriation has occurred;

    • (ii)

      (ii) the extent to which the government action interferes with distinct, reasonable investment-backed expectations; and

    • (iii)

      (iii) the character of the government action.

  • (b)

    (b) Except in rare circumstances, non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations.

236 See International Institute for Sustainable Development, IISD Model International Agreement on Investment for Sustainable Development, Art. 8 (Apr. 2005), <http://www.iisd.org/pdf/2005/investment_model_int_agreement.pdf> (“bona fide, non-discriminatory regulatory measures… designed and applied to protect or enhance legitimate public welfare objectives, such as public health, safety and the environment” per se do not constitute indirect expropriations).

237 See, e.g., Public Citizen, supra note 11; see also Andrew, Nikiforuk, 11 Feet Under , Globe & Mail (Can.), Nov. 26, 2004, at 58.

238 For the range of practices, see, for example, 1 UNCTAD, supra note 24.

239 E-mail from Dino Kritsiotis (Mar. 22,2006) (on file with author); see also Alan, Redfern & Martin, Hunter, Law and Practice of International Commercial Arbitration 238–46, 38284 (4th ed. 2004).

240 See Thomas, E. Carbonneau, Arbitral Law-Making , 25 Mich. J. Int’l L. 1183, 1199 (2004).

241 See Jeffery, P. Commission, Precedent in Investment Treaty ArbitrationA Citation Analysis of a Developing Jurisprudence , 24 J. Int’l Arb. 129, 13741 (2007); see also id. at 136 (“esprit de corps amongst ICSID and other investment treaty arbitrators”).

242 See, e.g., International Bar Association, Rules of Ethics for International Arbitrators (1987), available at <http://www.ibanet.org/images/downloads/pubs/Ethics_arbitrators.pdf>; International Chamber of Commerce, Rules of Arbitration, Art. 7 (entered into force 1998), available at <http://www.iccwbo.org/court/english/arbitration/pdf_documents/rules/rules_arb_english.pdf>.

243 On the former, see Günther, J. Horvath, The Duty of the Tribunal to Render an Enforceable Award , 18 J.Int’l Arb. 135 (2001).

244 Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, Art. 52, Mar. 18, 1965, 17 UST 1270, 575 UNTS 159 (listing five reasons for annulment, including “serious departure from a fundamental rule of procedure” and “fail[ure] to state the reasons on which [the award] is based”); Convention on the Recognition and Enforcement of Foreign Arbitral Awards, Art. 5, June 10, 1958, 21 UST 2517, 2520,330 UNTS 38,42. See also Andrea, K. Bjorklund, Reconciling State Sovereignty and Investor Protection in Denial of Justice Claims , 45 Va. J. Int’l L. 809, 87173 (2005). See generally Michael, W. Reisman, Systems of Control in International Adjudication and Arbitration: Breakdown and Repair (1992). In addition, the counsel appointed by the ICSID Secretariat to assist with its arbitrations may offer an informal sort of review before publication.

245 Compañía de Aguas del Aconquija S.A. & Vivendi Universal v. Argentine Republic, ICSID No. ARB/97/3, Decision on Annulment (July 3, 2002), 41 ILM 1135 (2002); Mitchell v. Democratic Republic ofthe Congo, ICSID No. ARB/99/7, Decision on Annulment (Nov. 1, 2006), available at <http://ita.law.uvic.ca>.

246 Commission, supra note 241, at 148–53.

247 Like Commission, I think Carbonneau, supra note 240, at 1204, goes too far when he describes the process of cross-arbitral interactions as a “process of stare decisisSee also Tai-Heng, Cheng, Precedent and Control in Investment Treaty Arbitration , 30 Fordham Int’l L.J. 1014, 103032 (2007).

248 See supra note 13 and corresponding text.

249 See, e.g., Michael, D. Goldhaber, Wanted: A World Investment Court , Am. Law., Focus Europe, Summer 2004, <http://www.americanlawyer.com/focuseurope/investmentcourt04.html> (quoting Brigitte Stern in connection with Argentina cases: “You have the potential … for 20 arbitrations, one problem, and 20 solutions.”). As things turned out, all cases on Argentina to reach the merits found no expropriation. See also Brigitte, Stern, Trois arbitrages, un mȇme problème, trois solutions , 1 Rev. De L’arbitrage 3 (1980) (regarding Libyan nationalization arbitrations).

250 Mar. Int’l Nominees Establishment v. Republic of Guinea, ICSID No. ARB/84/4, Decision on Annulment (Dec. 22, 1989), 5 ICSID REV. 95, paras. 5.09, 5.08 (1990); see also Vivendi, 41 ILM 1135. See Reisman, supra note 244, at 84–85.

251 Wena Hotels Ltd. v. Arab Republic of Egypt, ICSID No. ARB/98/4, Decision on Annulment (Feb. 5, 2002), 41 ILM 933 (2002); MTD Equity Sdn. Bhd. v. Republic of Chile, ICSID No. ARB/01/7, Decision on Annulment (Mar. 21, 2007), available at <http://ita.law.uvic.ca>.

252 Parsons & Whittemore Overseas Co. v. Société Générale de l’Industrie du Papier (RAKTA), 508 F.2d 969 (2d Cir. 1974); Czech Republic v. CME Czech Republic B.V., 42 ILM 919, 963–64 (2003) (Svea Ct. App. 2003) (Swed.) (interpreting Swedish arbitration law allowing set-aside for excess of mandate as requiring that “an almost deliberate disregard of the designated law must be involved”). See generally Redfern & Hunter, supra note 239, at 421–27.

253 See supra note 252. For other investment cases rejecting annulment, see Eureko B.V. v. Republic of Poland (Ct. 1st Inst., Brussels Nov. 23, 2006) (affirmed on appeal); Occidental Exploration & Prod. Co. v. Republic of Ecuador, [2006] EWHC (Comm) 345 (Q..B.) (Eng.); S.D. Myers, Inc. v. Canada, [2004] F.C. 38 (Can.), all available at <http://ita.law.uvic.ca>.

254 For a useful discussion, see Newcombe, supra note 26, at 14–16.

255 Compare Lauder v. Czech Republic, Final Award, paras. 202–04 (UNCITRAL Sept. 3, 2001), with CME Czech Republic v. Czech Republic, Partial Award, paras. 575–85 (UNCITRAL Sept. 13, 2001) [hereinafter CME], both available at <http://ita.law.uvic.ca>.

256 Lauder, para. 202; see id., paras. 201–04.

257 CME, para. 603.

258 Treaty Concerning the Reciprocal Encouragement and Protection of Investment, U.S.–Czech & Slovk. Fed. Rep., Art. III(1), Oct. 22, 1991, available at <http://tcc.export.gov/Trade_Agreements/All_Trade_Agreements/exp_002809.asp>.

259 Agreement on Encouragement and Reciprocal Protection of Investments, Neth.–Czech & Slovk. Fed. Rep., Art. 5, Apr. 24, 1991, available at <http://www.unctad.org/sections/dite/iia/docs/bits/czech_netherlands.pdf>.

260 CME, paras. 150–51.

261 Id, para. 606.

262 Justin, D’Agostino & Oliver, Jones, Energy Charter Treaty: A Step Towards Consistency in International Investment Arbitration? 25 J. Energy & Nat. Resources L. 225, 22930 (2007).

263 Enron Corp. & Ponderosa Assets v. Argentina, supra note 13, para. 247.

264 Myres, S. McDougal, Harold, D. Lasswell, & Michael, W. Reisman, The World Constitutive Process of Authoritative Decision , in International Law Essays 191, 192 (1981).

265 ILC Study Group Report, supra note 50, at 8; on the difficulties of distinguishing between general and special rules, see Koskenniemi Study, supra note 1, at 60–65.

266 Yuval, Shany, The Competing Jurisdictions of International Courts and Tribunals 114, 117 (2003). See generally id. at 99–120.

267 Cf. Pauwelyn, supra note 1, at 178–88.

268 On the varied interpretations of nondiscriminatory treatment across trade and investment panels, see Nicholas, DiMascio & Joost, Pauwelyn, Nondiscrimination in Trade and Investment Treaties: Worlds Apart or Two Sides of the Same Coin? 102 AJIL 48 (2008).

269 Koskenniemi refers to this nonetheless as a conflict through “conflicting interpretations of general law.” Koskenniemi Study, supra note 1, at 31; see also Pauwelyn, supra note 1, at 148-50, 155–57.

270 Right of Passage over Indian Territory (Port. v. India), 1960 ICJ REP. 6, 37–39 (Apr. 12); see also Koskenniemi Study, supra note 1, at 46–48.

271 Asylum (Colom./Peru), 1950 ICJ REP. 266, 276–78 (Nov. 20).

272 Cf. Theodore, Kill, Note, Dont Cross the Streams: Past and Present Overstatement of Customary International Law in Connection with Conventional Fair and Equitable Treatment Obligations , 106 Mich. L. Rev. 853, 86469 (2008).

273 ICJ Statute, Art. 38(1). See the helpful discussion in Shany, supra note 266, at 86–94.

274 Koskenniemi Study, supra note 1, at 253.

275 Técnicas Medioambientales Teemed, S.A. v. United Mexican States, ICSID No. ARB(AF)/00/2 (May 29, 2003),43 ILM 133, 164(2004) (citing four European Court cases); See also Azurix, supra note 28, para. 312 (noting that ECHR criteria for expropriation used in Teemed “provide useful guidance,” although not applying them explicitly).

276 Teemed, supra note 275, at 165–72.

277 See Shany, supra note 266, at 101–02.

278 Cf. Joseph, William Singer, Facing Real Conflicts , 24 Cornell Int’l L.J. 197, 202 (1991) (“A rebuttable forum law presumption—while requiring the forum to articulate the policies underlying forum law—encourages the forum to articulate why forum policy is better than the policy of the competing jurisdiction.”).

279 Cf. Myres, S. McDougal, Harold, D. Lasswell, & James, C. Miller, The Interpretation of Agreements and World Public Order 29–30, 4041,48,93 (1967); see also Koskenniemi Study, supra note 1, at 48–49.

280 Fortier & Drymer, supra note 12, at 324–25.

281 Firemans Fund, supra note 215, para. 176.

282 Id., para. 176(j) & n.161 (citations omitted). For a recent award examining and distinguishing ECHR jurisprudence on the effective date of an expropriation, see Victor Pey Casado v. Republic of Chile, ICSID No. ARB/ 98/2, paras. 600–10 (May 8, 2008), available at <http://ita.law.uvic.ca>.

283 See Young, supra note 53, at 120.

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